background photo via huffington post
After I filed my taxes this year and was made aware of how much money I was to going to get back, I felt like clicking my heels and skipping over to the nearest shopping mall where I could treat myself for all my ~hard work~ and check off everything on my, “to-upgrade list.” While slipping into a shopping k-hole would have made me feel like an emperor living in opulence, I knew I needed to save for the future and really stretch those dollars to all their worth. There were a number of smart things that I knew I could do with my money such as topping up school loan payments or saving for household items that are investments and have longer “shelf lives.” Below are 7 SMART ways to spend that refund check that don’t include luxury handbags or overpriced candles. Don’t worry, we’ll get through this together.
1. Pay off your credit card debt. I don’t know about anyone else but in the winter I find myself charging increasingly more and more on my credit cards until one day I open up my statements and it’s just like fffffuuuuuuuuuuucccccckkkkkk, definitely did not need to spent $50 on cocktails and peanuts on the way to dinner. Perhaps it’s the cold weather that forces us to drink indoors more so than we would in the spring and summer when we could simply be taking walks in the sunshine for free. If you have extra cash coming in, now is the time to throw it at those lingering credit card bills and get ahead of yourself. There are few things in this world more satisfying than seeing that balance fall to $0.00.
2. Funnel some money into your “Emergency Fund.” Everyone should have an emergency fund of money to fall back on in case things in life go awry (and they always do… car repairs anyone???) During the last year I’ve had a number of things to pay for unexpectedly and having an emergency stash of cash really helped me to stay on track without feeling like I didn’t have control over my finances. Even if you can only portion out a small chunk of money into this fund, it’s truly better than nothing. Every little bit that you can put away ahead of time counts because you never know when you’ll be in need.
3. Make a big payment toward one of your school loans. I have a couple of lingering student loans, payments for which are always in the back on my mind and cause me slight anxiety when I think about how long it will take me to pay them all off. One of these loans has a particularly high interest rate and it kills me to think about the large chunk of the money i’ve paid thus far, having only gone towards interest and not the principle of the loan =/ Whenever I have extra cash I try and increase that month’s loan payment which helps me feel like i’m tackling something overwhelming and making it manageable.
4. Invest in your home/apartment. Rather than frivolously spending your refund on clothes, makeup and lavish dinners out, investing in items for your home or apartment will ensure that your money is being spent on items that you will use for years to come. You spend a majority of your time in your home and it should be a place that you look forward to going home to and which also reflects your personal style. When you invest in your home, whether it be taking care of small repairs, painting or redecorating, it’s a purchase that you can physically walk past on a daily basis and think about the money that you spent smartly!
5. Set aside money to fill in gaps in your health insurance. Being a young and healthy 20 something, signing up for health insurance with my employer feels a lot like throwing a dart at a board and just hoping it sticks. I’m not totally sure what i’m doing or what the repercussions of selecting the cheapest possible plan are, but hey, it’ll all work out right? Wrong. Going to your eye doctor for glasses and realizing that your plan didn’t include vision coverage is enough to make anyone shriek in horror at the bill headed their way. If you have extra money to set aside for upgrading your health insurance plan for the year, do it. There is nothing more important than your health and as a smart young adult you should be taking the necessary steps to make sure your ass is covered.
6. Invest in your career. It’s never a bad idea to access the gaps in your skills and look for the potential to improve yourself when it comes to managing your career. As a designer, there seems to be limitless resources out there for me to partake in such as online courses or weekend workshops. There are a ton of websites that offer online e-courses for very reasonable prices that you can move through at your leisure (i.e with a coffee, scone and much internet-ing) Sometimes when it comes to your career, it takes investing money to make money. In my mind, taking a course that will make me a more valuable designer to a potential employer is something that’s worth will far exceed the negligible $30 course sign up fee.
7. Put some money away for that vacation you’ve been wanting to take. The last of our 7 tips is not the most practical of the bunch but I don’t think it’s any less valuable of a way to spend your money. When managing your finances in a smart way, everything can feel very calculated and precise. It’s good to break that up with the feeling of having a trip to look forward to and save up for. Whether it’s a long weekend away or a flight to someplace you’ve been dreaming of going to for a long time, you should put a small amount of money away every so often to make the dream a reality. After all, the value of travel is one that we’ve touched on before and will enrich your life in ways that tangible things can’t.